Why the axe fell on HealthSMART

Written by Kate McDonald on 21 May 2012.

The Victorian government has put an end to the troubled HealthSMART program, citing cost overruns and lengthy delays in implementation of the project.

The announcement was not unexpected, as the government had cut funding for staff numbers last year, according to The Age newspaper, and the project was the subject of a scathing report recently by the Victorian Ombudsman.

The government had allocated just $100 million over four years in last month's Victorian budget, well below what would be required to fully implement the program.

Victorian Health Minister David Davis announced that funding would cease from June 30, telling AAP that the government would now work on a hospital-by-hospital basis to set up individualised systems.

"In those hospitals where it has been put in place or partially put in place, health services will make their decisions from that position, but going forward beyond that health services will be able to examine what is appropriate for their particular service," AAP quoted him as saying.

Further comment has been requested from the Minister's office.

The shadow minister for health, Gavin Jennings, criticised the government for announcing the cancellation of the program without a replacement plan.

“This government needs to outline how it will replace this system,” Mr Jennings said.

“It’s important the patients' records can travel with them on their journey through the health system, which is why HealthSMART was introduced.

“It’s a system that hospitals want and patients want, so for the government to announce it will scrap it without a replacement plan is not good enough.

“The government has to explain why it allocated $100 million only three weeks ago in the budget to improve hospital IT systems and is now backtracking from implementing its biggest hospital IT project, HealthSMART.”

It is understood that Cerner's clinical system, one of the key planks of the HealthSMART project, has only been installed in four health services, with six still struggling to get the system up and running.

The other components – a financial system from Oracle and the iPM patient management system from CSC, formerly known as iSOFT – are understood to have been implemented throughout the state.

A spokesperson for CSC said the implementation of iPM was completed at 10 HealthSMART agencies by the June 2010 deadline. “Since then, CSC has worked with HealthSMART to maintain and support these installations,” the spokesperson said.

HealthSMART was one of 10 major ICT projects criticised by the Victorian Ombudsman, George Brouwer, in a report he released in November last year.

Mr Brouwer found that HealthSMART, which was originally budgeted at $323 million, would require an additional $243 million to complete.

His investigations showed that the then-secretary of the Department of Health (DOH), Fran Thorn, who stood down late last year, had to actively involve herself in the HealthSMART project after ongoing poor vendor performance and held teleconferences with Cerner's chief executive in the US to demand better resources be put into the project.

He also found that HealthSMART had no business case, despite seeking over $300 million in funding, and instead had put forward a funding submission based on a high-level strategy document and a 14-page implementation plan.

“Poor planning has handicapped the HealthSMART program,” he wrote. “The project costing and timelines were ambitious and the Department of Health (DOH) seriously underestimated the size of the task. The project inevitably ran over budget by about 35 per cent and has taken more than seven years to deliver only a partial implementation of the core clinical application.

“The HealthSMART clinical application, which had the potential to deliver the most benefit, still has not been delivered as planned and is facing strong resistance among user groups. Instead of being the focus of the project from the beginning, DOH focused more on scoring easy wins with the less complex, but less important financial and patient management systems.

“DOH had an opportunity to develop a sustainable, integrated health ICT foundation for the state but there is a real danger that this opportunity may not be fully realised.”

The HealthSMART program was pitched as a “whole-of-health” ICT strategy, covering four main portfolios. One was resource management systems, including financial and material management and human resources, which involved the installation of systems from Oracle and Frontier Software's Chris21 platform.

Another was patient and client management systems, based on CSC's iPM software. This also included InterSystems’ TrakCare as a community-based client management system, which has been successfully rolled out to community healthcare providers under the HealthSMART program.

The program also saw the establishment of HealthSMART Services (HSS) to support the infrastructure on which the HealthSMART applications are delivered. It is unclear what will happen to HSS once funding ceases.

A picture archiving and communications (PACS) system was later added to the program, along with a payroll project and a rural and regional project. The main clinical component was provided by Cerner, based on its Millennium architecture.

"[W]hile DOH planned to roll out the clinical application to 10 health services, it has only been able to deliver it into four health services within the allocated budget," Mr Brouwer wrote.

According to the HealthSMART website, the clinical system has been rolled out to Austin Health, Peninsula Health, Eastern Health and the Royal Victorian Eye and Ear Hospital.

Mr Brouwer wrote that there were early warning signs the project was in trouble, referring to an Auditor-General's report from 2008 which warned of over-ambitious milestones, a lack of financial insight into practical cost considerations and an overestimation of the standard of technological infrastructure in the health sector.

“HealthSMART was originally scheduled for completion by the end of 2007,” Mr Brouwer wrote. “The timelines were later extended to the end of 2009. The finance and patient management applications were finally completed during 2010.

“Delays and budget overruns compromised the planned release of the clinical application and DOH estimated that it will take up to two years to finish the remaining six health services. This means that by the time the original specification is delivered, the system will be over ten years old.”

He said the main delays related to adopting Australian terminology and medications content for electronic prescribing.

“By the end of 2011-12, the HealthSMART program will have been running for nine years and will only have delivered the clinical application into four of the ten planned health services. DOH estimates that it will cost up to $95 million to complete the remaining six health services. This would place the final project cost at around $566 million, 33 per cent over the planned budget.”

Mr Brouwer wrote that of greater concern was the potential for the clinical application to have a negative impact on patient safety by forcing doctors to adopt a model of practice based around the functionality of an ICT system rather than best medical practice, and requiring doctors to jump between multiple systems to access patient data.

He also pointed to an “overly complex, unfriendly user interface that is encouraging doctors to take shortcuts and in some instances refuse to use the system at all”.

In a statement to Pulse+IT, a Cerner spokesperson said: “Cerner has been in Australia for over 20 years and continues to support all existing and future clients, including those that are part of the HealthSMART program.”

CSC's spokesperson said all contracted CSC solutions for HealthSMART have been delivered on schedule and to budget. “Following implementation in June 2010, CSC (then iSOFT) and HealthSMART extended the head agreement until 2015.

“We are unable to comment on cost overruns in the wider HealthSMART program. We still have contractual commitments with HealthSMART and we will continue to honour those. So far there is no information coming out of the cancellation of the program.

“Over the coming weeks we will seek to gain greater clarity and will ensure that we continue to work with HealthSMART and all parties in Victoria to deliver the solutions required.”

Stephen Parnis, president of the Victorian branch of the AMA, said the organisation “acknowledges that HealthSMART has been disappointing”.

Referring to the recent budget, he said AMA Victoria welcomed the $100 million over four years allocated to the Victorian Innovation, E-Health and Communications Technology Fund but called for it to be spent on establishing electronic discharge summaries to improve the interactions between hospitals and GPs.

"We need a clinically-led approach to solving our problems with IT, rather than wasting money on programs that don't work for patients,” Dr Parnis said.

"We need to ensure that programs meet the needs of clinicians in individual health services. Doctors just want the tools of the job made available. We just can't treat patients to the best of our ability without access to computers and good IT systems.”

Rodney Gedda, a senior analyst with independent ICT research firm Telsyte, said the cancellation of such a major project would have an effect on other eHealth projects in Australia.

“The biggest loss is not having an example, and learning experience, of unifying health ICT across a populous state like Victoria,” Mr Gedda said. “If the project was a success the model could have been adopted by other states and even nationally.

“In the long term the national impact may be minimal as the other states and the federal government have their own eHealth programs running. So while it’s a shame to lose HealthSMART, other programs will continue.”

He said that given one of the big problems with healthcare in general is access to information, a project that aimed to consolidate health information was a good thing.

“In the case of HealthSMART, it was a state-wide ICT infrastructure service project which was capable of running an eHealth program as well,” Mr Gedda said. “The idea of developing a standard, centralised infrastructure for delivering health IT and eHealth services across a state is sound in theory, but if the execution is flawed then it is unlikely to succeed as a project.

“If HealthSMART was costing too much then the Victorian government had every right to end the program, but this is unlikely to put a nail into other eHealth programs around the country.”

A request for more information has been lodged with the office of the Victorian Health Minister.

Comments

There is a common misconception about HealthSMART clinical creating a common electronic medical records. Two people cited in this article seem to carry this perception and they should know better. The roll out of healthSMART was done on a per health service basis i.e. Austin Health, Peninsula Health, Eastern Health etc, each having their own unique eMR, they are not linked or shared in any way. The vendor is not to blame for this, it was one of the core constraints of the original project charter imposed by the status quo business model of health in VIC, DHS decisions, funding, and the interpretation of privacy laws at the time. These health services all had existing health service based paper MR and some even had certain level of existing eMR. The achievements here are minimal and the opportunity for gain has been missed entirely. Look at the model in South Australia, it has been done there, it is possible in Aus.

Hi Matt. Thanks for your insight. We did ask Cerner a series of questions about the project but they only replied with a brief statement, which I've used in the story. It has been very difficult to find information about this issue as not many people will speak on the record. The Minister for Health hasn't got back to us either. If you'd like to give me some background, feel free to email me.

The project failed because doctors realize that there has never been any evidence that the EMR devices that were to be strung together improve outcomes or reduce costs. In fact, there is emerging evidence that the opposite is true. Why would clinicians want to be shackled with devices that are impediments to safe and effective medical care? Answer: THEY DON'T